A plan for future pandemics
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America’s small business owners are suffering in numbers we have not seen since the Great Depression. The American Property Casualty Insurance Association (APCIA) estimates that the closure losses from COVID-19 for businesses with 100 or fewer employees are between $255 billion and $431 billion per month.

Federal stimulus packages have been the economic bridge for struggling businesses impacted by COVID-19. While much more liquidity is still needed, policymakers and the business community also need to look toward the inevitability of future pandemics. Property casualty insurers, agents and brokers have united on a new customer-focused proposal for a federal program tailored specifically to help businesses meet the financial challenges from future pandemics.

The American Property Casualty Insurance Association, the National Association of Mutual Insurance Companies, and the Independent Insurance Agents & Brokers of America have released a plan to create the Business Continuity Protection Program (BCPP).The BCPP is designed to bolster the country’s economic resilience by providing simple, timely, and efficient financial protection and payroll support to the private sector in the event of a future declared health emergency. This program would deploy immediate funding to businesses when they need it most.

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Pandemics simply are not insurable risks; they are too widespread, too severe, and too unpredictable for the insurance industry to model or underwrite. A nationwide economic shutdown of millions of businesses simultaneously is beyond the capacity of any private industry to provide protections. Even with a government backing, private underwriters do not have the infrastructure to protect the entire economy. As we’ve seen in the past few months, pandemics are a national problem, and we need a national solution.

The BCPP is a solution that can work for everyone—customers of all sizes and structures—to provide protection against widespread economic shutdowns due to a future viral outbreak.

The BCPP would provide revenue replacement assistance for payroll, employee benefits, and operating expenses following a presidential viral emergency declaration. The BCPP would reimburse up to 80 percent of payroll, benefits and expenses for three months.

Businesses would purchase their desired level of revenue replacement assistance through state-regulated insurance entities that voluntarily participate with the BCPP. Under the BCPP, the Federal Emergency Management Agency, with limited administrative assistance from private contractors, would provide the critical mechanism of administering relief to businesses. And the BCPP would be able to purchase private reinsurance to protect federal taxpayers.

Future mitigation efforts will remain a top priority. The BCPP would work with risk mitigation experts to develop pandemic and viral risk mitigation guidelines and safety standards for businesses that would be available at the time of application.

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The advantages of the BCPP approach are significant, providing simple, immediate relief for employers that are directed to close.

The COVID-19 pandemic is an unprecedented event. We must use this experience to learn for the future, and to establish systems that protect businesses, provide certainty, and restore confidence in the stability of the American economy. Insurers look forward to future dialogue with the business community to meet their needs in this vitally important public policy discussion.

David Sampson is the president and CEO of the American Property Casualty Insurance Association (APCIA). Charles Chamness is the president and CEO of the National Association of Mutual Insurance Companies (NAMIC). Bob Rusbuldt is president and CEO of the Independent Insurance Agents & Brokers of America, Inc. (Big “I"). APCIA and NAMIC represent approximately 90 percent of the home, auto, and business insurance marketplace. The Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing more than 25,000 agency locations united under the Trusted Choice brand.